Asian stocks rose on Monday to their highest level since the dark days following Lehman Brothers' collapse last September while the U.S. dollar fell, as a solid outlook for corporate earnings lured investors to riskier, higher-yielding assets and commodities.

European stock futures were up 1.25 percent, U.S. equity futures also pointed to a higher open and crude rose above $64 a barrel as the global recovery trade accelerated after sputtering in June.

Sentiment was also helped after CIT Group Inc clinched a last-minute $3 billion rescue by a group of bondholders and probably escaped bankruptcy. CIT lends to nearly one million small and mid-sized U.S. businesses.

Aside from more company earnings reports, the highlight for global markets this week will be Federal Reserve Chairman Ben Bernanke's testimony to Congress on Tuesday and Wednesday, especially any comments he makes on exit strategies from extraordinary actions taken to support the economy.

We expect him to boost market confidence that the U.S. central bank will do so in a way minimizing negative impact on price stability and the U.S. dollar, said Dariusz Kowalczyk, chief investment strategist with SJS Markets in Hong Kong.

We expect consolidation of equity markets after last weeks rally, modest correction in commodities, some narrowing of corporate CDS spreads, modest rebound in Treasuries, and a small gain in the dollar, he said in a note.

Japan's markets were shut for a public holiday.

The MSCI index of Asia Pacific stocks outside Japan <.MIAPJ0000PUS> rose 2 percent to its highest level since September 29, putting it on track for a fifth consecutive session of gains.

Gains were spread fairly evenly across the sectors, with materials, technology and financials leading.

Hong Kong's Hang Seng <.HSI> jumped 2.4 percent, supported by bank stocks.

South Korea's KOSPI <.KS11> closed 2.7 percent higher, a near 10-month high, while Australia's S&P/ASX 200 index <.AXJO> was up 1.3 percent, boosted by higher commodity prices.

Strong earnings and positive economic reports such as a surprising rise in U.S. housing starts in June helped U.S. stocks close out their best week in four months on Friday. <.N>

Of the S&P 500 firms that have reported quarterly results so far, 71 percent have beat analysts' expectations, 20 percent were below estimates and 9 percent were in line, according to Thomson Reuters data.

While this positive momentum has lifted equity markets, large credit-related losses at Bank of America and an unexpected drop in revenue at General Electric Co were stark reminders of corporate America's struggle.

The U.S. dollar and yen slid in choppy trade, as investors leaned toward higher-yielding currencies.

The Australian dollar rose 1.1 percent on the day to 76.52 yen, though it has been darting around in 70 yen to 80 yen range for the last month.

The euro climbed 0.8 percent to 134.25 yen, while the dollar rose 0.4 percent to 94.73 yen.

The ICE Futures U.S. dollar index edged down 0.2 percent <.DXY>, locked in a steep downward trend channel.

The soft U.S. dollar had traders pushing up commodity prices. The benchmark third-month copper contract in Shanghai jumped 3.8 percent to the highest in nine months.

U.S. crude for August delivery, rose 1.1 percent to $64.26 a barrel, after rising 2.5 percent on Friday on positive U.S. housing data that revived hopes of a global economic recovery.

After failing twice in June to make much progress above $71 a barrel, the front-month contract fell a week ago to a two-month low of $58.32.

The September Brent crude contract rose 0.9 percent to $65.98 a barrel.

(Additional reporting by Jungyoun Park in SEOUL; Editing by Tomasz Janowski)